CIHM 
Microfiche 
Series 
(Monographs) 


ICI\/iH 

Collection  de 
microfiches 
(monographies) 


H 


Canadian  Institute  for  Hittorical  IMicrorsproductiont  /  Inititut  Canadian  da  microraproductions  hiitoriquas 


995 


Technical  and  Bibliographic  Notes  /  Notes  technique  et  biDllographiques 


The  Institute  has  attempted  to  obtain  the  best  original 
copy  available  for  filming.  Features  of  this  copy  which 
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the  images  in  the  reproduction,  or  which  may 
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checked  below. 

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D 

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a  nouveau  de  fapon  a  obtenir  la  meilleure 
image  possible. 

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best  possible  image  /  Les  pages  s'opposant 
ayant  des  colorations  variables  ou  des  decol- 
orations sont  filmees  deux  fois  afin  d'obtenir  la 
meilleur  image  possible. 


D 


Additional  comnrtents  / 
Commentaires  supplementaires: 


This  item  is  ftlmad  at  the  reduction  ratio  checked  below/ 

Ce  document  est  filmc  au  t«ux  de  reduction  indique  ci-dessous. 

^0«  MX  18X 


n: 


22X 


Th*  copy  film«d  h«r«  has  b««n  raproducad  thanks 
to  tha  ganarosity  of: 

National  Library  of  Canada 


L'axamplaira  filmt  fut  raproduit  grlca  i  la 
gtnArosit*  da: 

Bibliotheque  nationals  du  Canada 


Tha  imagas  appaaring  hara  ara  tha  bast  quality 
possibia  considaring  tha  condition  and  lagibility 
of  tha  original  copy  and  in  liaaping  with  tha 
filming  contract  apacificationa. 


Las  imagas  suivantas  ont  ttt  raproduitas  avac  la 
plus  grand  sain,  compto  tanu  da  Is  condition  at 
da  la  nattata  da  l'axamplaira  filmi,  at  an 
eonformita  avac  las  conditions  du  contrst  da 
filmaga. 


Original  copias  in  printad  papar  covars  ara  fllmad 
baginning  with  tha  front  covar  and  anding  on 
tha  last  paga  witti  a  printad  or  illuatratad  impraa- 
sion,  or  tha  back  covar  whan  appropriata.  All 
othar  original  copiaa  ara  filmad  baginning  on  tha 
first  paga  with  a  printad  or  illustiatad  impraa- 
sion,  and  anding  on  tha  last  paga  with  a  printad 
or  illuatratad  impraaaion. 


Laa  aiamplairas  originaux  dont  la  couvartura  an 
papiar  aat  imprimia  sont  filmas  »n  commancant 
par  la  pramiar  plat  at  an  tarminant  soit  psr  la 
darniAra  paga  qui  comporta  una  amprainta 
d'Imprassion  ou  d'illustration,  soit  par  ia  sacond 
plat,  salon  la  cas.  Tous  las  autras  axamplairas 
originaux  sont  filmAs  an  eommanpant  par  la 
pramitra  paga  qui  comporta  una  amprainta 
d'imprassion  ou  d'illustration  at  an  tarminant  par 
la  darnitra  paga  qui  comporta  una  taila 
amprainta. 


Tha  laat  racordad  frama  on  aach  microflcha 
shall  contain  tha  symbol  — ^  (moaning  "CON- 
TINUED"), or  tha  symbol  y  Irnaaning  "END"), 
whichavar  applias. 


Un  das  symbolaa  suivants  spparaitra  sur  la 
darnlAra  imaga  da  ehaqua  microficha.  salon  la 
cas:  la  symbols  —^  signifia  "A  SUIVRE",  la 
symbols  V  signifia  "FIN". 


Mapa,  platas,  charts,  stc,  may  ba  filmad  at 
diffarant  raduction  ratios.  Thosa  too  larga  to  ba 
antiraly  includad  in  ona  axposura  ara  filmad 
baginning  in  tha  uppar  laft  hand  cornar,  laft  to 
right  and  top  to  bottom,  as  many  framas  as 
raquirad.  Tha  following  diagrams  illustrata  tha 
mathod: 


Las  cartaa.  pianchas,  tablaaux,  ate,  pauvant  itre 
filmte  1  das  taux  da  reduction  diffarsnts. 
Lorsqua  la  documant  ast  trop  grand  pour  atra 
raproduit  an  un  saul  clicha.  il  ast  filmA  i  partir 
da  I'angla  supAriaur  gaucha.  da  gaucha  i  droits. 
at  da  haut  an  bas,  an  pranant  la  nombra 
d'Imagas  nicassaira.  Las  diagrammas  suivants 
illustrant  la  mtthoda. 


1  2  3 


1 

2 

'^ 

4 

5 

6 

MICtOCOTY    HSOLUTION   TEST   CHAiT 

lANSl  ond  ISC  TEST  CHART  No   2i 


10    !!■-  i- 
^  ^  If  Ilia 


I.I 


11^ 


'1.25  11.4    mil  1.6 


A     APPUEO  \MA3E     \nc 


"octieslBf,  Utw  '0'"  '*C 
(7161  *e;  -  0300  -  Pno"* 
(■"6)   ^38  '  ^969   -  ""o 


7j 


HuniciEaLOmncreliij^oiPublic  unities 


Hv    I'ROFKSSOK    (AMES    .MAVOK 

OK  IHE  IXIVERSITVOF  T(iR,>STn 


r,  M    ^f""=«'As-'0=iafon  and  the  League 
of  Michigan  Municipalities,  held  at  Ann 
Arbor,  Mich.,  February  11-12,  1904 

M..hto„   Pomic.1  Sci.„o.A«,".„".VoII';,N„.4 


MiNicii'Ai.  ()\VNi:usii:i'oi'i"iiii.i(  I  Tii.irii:s 


I'ROIKSSDU   JAMKS   MAVOH,  111'   UH-;   rM'-KEiSITV   DK 


Any  ci'iKTi'lr  casi-  of  projtrtcil  iiiiiiiiii|iMl  ■'Wiicrsliip 
iii.-iy  111-  111.  iked  ,il  fiMiii  llirci-  (litlVrcin  |i.  liiits  nf  view  at 
'cast. 

Wc  may  look  at  it  from  the  |ioiiit  of  view  of  /'olilifs, 
from  wliidi  may  lie  estimated  tlic  effect  of  the  |irojoct 
ii|ion  tlic  interests  of  political  iiaKies,  and  also  the  effect 
of  it  u|ioti  the  |ioIitical  develo|imein  of  the  city  or  State. 
Or  we  may  look  at  it  from  the  I'coiuniiic  ]v\m  of  view, 
from  which  may  he  estimated  the  extent  to  which  the  prn- 
jectei!  ownership  would  he  an  economic  adxaiitapfc  or 
disadvantase,  in  hricf,  how  much  it  would  cost  the  citv. 
and  how  much  the  city  would  jjct  for  it  in  tansihlc  and 
in  intantjihle  returns.  Or  wc  tiii,i;ht  look  at  it  from  a 
point  of  view  which  is  neither  specifically  political  nor 
specifically  economical,  hut  which  mav  he  descrihe<l  as 
lieiuf;  sciitiiiii'iildl  o.  i'»i/i»/.«/rv,  from  which  point  of  view 
it  might  be  decided  to  support  a  project  of  municipal 
ownership,  on  the  ijround  that  the  puhlic  utility  which  it 
was  proposed  to  own  had  heen  exercised  h\'.  for  ex.'imjile, 
an  alien  company,  which  had  rendered  what  its  critics 
regarded  as  an  indifferent  service,  and  extorted  an 
excessive  amount  of  ])ayment  for  it.  The  ipiestion  as  to 
whether  or  not  it  would  remunerate  the  city  to  render  the 
service  on  its  own  account,  from  such  a  ])oint  of  view,  is 
not  important.  The  view  is  that  the  service  must  he 
taken  out  of  the  liands  of  the  company,  even  if  the  trans- 
action should  result  in  a  pecuniary  loss.     This  point  of 


view  is  one  witli  wliirli  any  i>f  us  inifjlit  on  occasion  sym- 
pathize. Iiiit  one  cnmint  (liscn^s  it  apart  fn>in  a  concrete 
case,  ar  '  one  can  apply  to  it  no  principle  cxccptiiif,'  ttie 
Rcneral  one,  that  it  is  usually  uiiwisu  lo.'  a  connniinity  to 
allow  itself  to  lie  stampeded. 

There  tlnis  remain  the  luo  first  mentioned  |ioiiits  of 
view — the  political  and  the  economic. 

A.  From  the  political  |Kiint  of  view  there  is  the 
consideration  that  any  extcn';ion  of  the  pnhlic  anthority 
involves  the  diminntion  of  privalc  freedom,  and  there- 
fore of  individual  initiative.  The  vast  auricnltural  and 
industrial  development  of  the  I  nited  States  has  been 
accomi)lisheil  practically  wholly  hy  spi^ntaneous  individ- 
ual, or  hy  spontaneous  cor|iorate  .action. 

The  compulsory  |iowers  of  Federal,  State  or  munic- 
ipal authority  have  rarely  hecn  exercised  in  llic  industrial 
field,  and  when  they  liav-e  hecn  exercised,  it  has  heen 
attvmpteil  rather  to  rcfjulaie  than  to  orn.i'iize.  There  is 
much  to  he  said  for  the  arfjument  that  safety  lies  that 
way. 

There  are  tindeniahle  dangers  in  the  unrestricted  pur- 
suit of  private  gain.  This  unrestricted  pursuit  heconics 
apparently  more  dangerous  when  it  is  accon)|)li5he<l  hy 
means  of  associations  of  persons,  formed  for  the  jmr- 
pose  of  securing  larger  aggregate  gains  by  spontaneous 
corporate  action  than  could  he  ol)tained  hy  the  members 
nf  the  group  indivi<lually.  This  eflfective  corporate  action 
is  alleged  to  imply  the  exploitation  of  individuals,  and 
througli  that  the  monopolization  of  natural  resources. 

Yet  legislation  against  combinations,  whether  of 
labor  or  of  capital,  has  usually  been  ineffectual.  Where 
it  has  appeared  to  be  eflfectual  it  has  often  really  had  the 
result  of  lulling  the  people  to  sleep,  while  exploitation 
goes  on  more  actively  than  before. 

Political  and  social  forces,  unimpeded  by  legislation, 
may  probably  be  counted  upon  to  prevent  undue  exploita- 


tioii  iif  private  [lerscins.  and  t.i  pri'vent  it  more  iffccttially 
than  legislation  spwially  ilcviseil  for  tlie  |iiirposi.. 

Al'  loniliinalions,  coiiipnlviry  it  sp. .ntaiuMiis,  have 
to  expetii-iH-e,  sii..iier  or  later,  iiiihspiitalilc  hinitations 
not   iinposiil   liy  legislative  enactment,   liiit  ni'Verlhii-^s 

quite  irresistable.      At;.iin  ami  ayain  conihin.  t s         f 

met  their  (IchiuU-  from  tln'  iieKlecled  element. 

From  the  political  point  of  view  also,  there  are  the 
seri.ius  consi.lcr.-'tions  which  are  exciteil  hy  the  nnfortn- 
nate  fact,  that  nmnicipal  administration  i..  inextricalily 
intermintjied  with  party  politics.  .State  and  I'ederal,  with 
the  result  of  K^oss  ahnse  of  the  p..aers  ..f  palronane  and. 
in  certain  notorious  cases,  the  more  or  less  wholesale  roh- 
hery  (  I  the  people  for  the  purpose  o.'  .issistin;,'  a  particu- 
lar politicaj  party  to  (jet  ..r  retain  power.  The  additional 
anioum  of  patronage  which  imuiicip.-il  ownership  -nuUl 
entail  must  necessarily  increase  the  daufjcrs  from  these 
suurces,  and  the  additional  amount  which  would  recpiirc 
to  he  horrowed  and  jh  wouki  re.|uire  to  he  raised  hy 
taxation  and  e.xpciuled.  would  afTord  additional  possihili- 
tics  for  the  exercise  of  the  nefarious  trade  of  the 
"hondler." 

It  seems  no  reasonahle  answer  to  fears  of  tlu^  kind 
that  the  increased  responsihili,  es  would  hrinjj  increased 
virtue  and  conscieiUiousncss.  That  is  a  iiypothesis  which 
seems  to  he  contradicted  hy  facts  and  experience. 

B.  Krom  the  economic  point  of  view,  the  following 
considerations  may  lie  suggested  : 

I.  The  adoption  of  municipal  ownership  causes, 
for  so  much  as  it  amounts  to.  an  increase  in  the  public 
finances.  It  produces  an  increase  of  the  area  of  fjov- 
eri.  ntal  or  comjinlsory  finance,  and  correspondingly 
diminishes  the  area  of  private  uiance.  In  the  event  of 
the  ownershi])  being  accompanied  by  net  pecuniary  loss, 
that  loss  will  require  to  be  met  by  taxation,  that  is,  by  a 
compulsory  contribution  to  the  jiubhc  powers  from  the 


priviiti'  |Kn'ki'i.  Miiri'iwr,  in  iliiiiinl'-liiii^'.  as  ii  tmisl. 
ihv  ari-a  ol'  i»tssil)k'  actinn  liy  |ni\atL'  iiiitialivi',  as  iinli- 
lalnl  al»>vi'.  il  ti'iuls  tu  ili'slmy  inivalf  initiative  ami  ti> 
linKliiii'  a  slitc  of  till'  |.iililic  iiiinil  mi  wliii-li  tin-  ouninti- 
iiity  is  ri'Karileil  as  a  iiniviT-al  iimviikr.  Tliis  state  "f 
mind  is  up  Ui  a  certain  pnint  inevitaMe  in  (•■■tintrie'.  where 
llie  aeeiinuilatiiin  t»f  private  capital  jimeeeils  sinwly.  and 
when;  enterprises  thai  seem  indispensahle  tn  iininieipal 
pni)4:re-v  are  nndertaken  liy  enmpiilsury  aetinn.  liecailse 
private  initiative  does  not  exist  on  an  adeipiate  scale;  lutt 
it  is  a  danj;eroiis  state  of  mind  t"  cultivate.  It  tends 
alni'ist  inevitalily  toward  petty  political  chicanery,  and  to 
tile  wholesale  purchase  of  constituencies  liy  the  party  in 
power.  It  is  not  realized  that  every  draft  upon  the  piililic 
purse  is  sooner  or  later  a  draft  upon  the  private  piir»c  of 
the  citizens.  There  are  iiiiincrotis  instances  of  nuinicipal- 
ities  lieiii^;  urt;ed  hy  eiitliiisiasts  into  iiiidertakiii),'s  which 
have  lieen  liurdeiis  to  them,  even  althotii,di  some  heiiefits 
may  have  accrued.  There  are.  for  ex:iiii|'le.  the  case  of 
(inciiinati  ;iiid  the  Soiithern  K.ailway,  lialtiiiiore  and  the 
Western  Maryland,  tlic  small  City  of  Whcelinf,'  and  its 
railway  hoiids.  and  I'hil.-idelphia  and  its  ^as  works.  It 
was  assnmci^  that  the  enterprises  were  necessary.  Pri- 
vate enterprise  was  at  the  time  too  fiehle.  and  under  pres- 
sure of  enthusiasts  the  puhlic  found  itself  impcllcil  to 
enter  upon  them.  .So  also  institutions  which  in  well- 
estahlished  c. ininuinities  are  supported  hy  priva''-  endow- 
ment or  suliscriptioii — as  hospitals,  r.fnges  and  the  like 
— are  in  less  well-estahlished  communities  wholly  or  par- 
tially jirovided  out  r.f  the  tax  revenue.  There  is  a  wide- 
spread illusion  tli.il  the  quickest  and  easiest.  tliDURh  in 
the  lonn  run  it  is  the  most  expensive  way,  to  have  any 
improvement  effected,  is  for  the  i  uhlic  authority  to  do  it. 
This  course  appears  to  cost  mihody  anything. 

The  iirncticc  of  drauincf  on  the  puhlic  authority  for 
tiioncy  and  services,  prohahly  in  the  hcfjinninf;  necessary, 


'\ 


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—  IS  - 


I.CI 


III'    lin    k,'(|    Mil.  ,1,    ;i« |.|^ 


kni    |||l.,„    ;„   ;|    I 

l-lii-s  rirv  I,,  1...  ,|,,T„ii 

Tin-  |iiiM,r  aiitli,,riiii.s 
"l'  the 


l"i     "    I'MI-.'  lornr,  t, 


aic  ,i|,|,r, 


,        "■""'"'"„>■  ,„  ,,n,|„,r,„,„  ,,  ,1,,.^:      ■;';' 

"■  iMiitiin,,,-,!  .■Miiiinist,,,,!,,,,,  „,, 


'111'  iiU'Milurs 

I'liarw  1,1'  il,..  r,.  ' iii-iTaii.,ns  »|.  ,  , 


.Ills 


-  •;M..rn.ar.,,,H,,w,;.:':;':;;!::?;;;:;'^'' "; 

•licscleinaii.ls.  '  ''■'"'  ''■""f  "f 

-'        I'llCri'     IX    ;,|s,,     ,|l,.    ,•..„.,. 1 : 

'     tilt     (  .   iimiirx , 

'""-   ■""I-  1"  liiiiiiiiisli   tin.  total 


■  iii|iiil 
I'l-ivaii 

"•"  Iir.iilticti.  .n;- 
l 'tiller  a  svsn 


i'.v.  litt,  u„„M      ;  ,    ,     in     '""'•''•^■•■''''>-  ••'IMM-..a,li  „„,al- 

v'-^''--"ia .  ."irr'^^/^''-''^''^^ " 

"f  I'rucluct,.,,,'  '      ••""■'■11^  'TU-aiiizalion 

''ap»--e,an!e;r:  l,T;';,;''"'■^■•,'''''^"'■'-- 
™'''-'\->'h->>niiu.:;^;:r  ,;^;;^:■-''-7"- 
'ii-ss!,,„;C;;::\:;;;;;:;;'"^  •-■>•-■>■".. It. ,;..,,,.. 

.hi^'^n.STtlr?™''''^- '^r  «"•-'-''-■-.  .t, 


—  6- 


United  States  or  in  Canada  to  embark  in  expensive  scien- 
tific enterprises,  such  as  electric  lighting,  while  the  streets 
are  iinpavecl  or  badly  paved.'  while  so-called  grade  cross- 
ings endanger  life."  and  while  the  streets  and  alley-ways 
are  the  breeding  places  of  disease.'  while  the  sewage  sys- 
tem is  defective'  or  where  fhe  water  supi)ly  is  inadeiniate.' 
seems,  on  the  face  of  it.  a  futile  proceeding. 

New  municipalities  are  anxious  to  emulate  rapidly  the 
older  cities,  where  the  slowly  accumulated  results  of  cen- 
turies of  labor  constitutes  an  inheritance  which  can  only 
be  rivab'd  at  immense  cost  to  the  generation  that  attempts 
the  rivalry. 

4.  While  mai.y  of  the  criticisms  which  may  be  urged 
against  the  extension  of  municipal  activity  intti  the  indus- 
trial field.  a|iply  with  equal  force  to  municipal  activity  in 
Europe  as  well  as  in  Ainerica.  there  are  certain  notice- 
able differences  in  conditions  which  must  be  taken  into 
account.  On  the  continent  of  Europe  the  Central  Gov- 
ernment exercises  a  very  stringent  (perliaps  too  strin- 
gent) control  ovei  the  municipalities.  During  the  eight- 
eenth and  nineteenth  centuries,  local  self-government  was 
seriously  diminished,  in  France  es])ecially  in  the  eight- 
eenth century,  and  in  Germany  in  the  nineteenth ;  in  • 
Great  Britain  local  self-government  was  nivaded  in  the 
nineteenth  century,  but  later  has  been  to  some  extent  rees- 
tablished. Thus,  on  the  Continent,  the  municipality  finds 
its  policy  largely  prescribed  for  it.  In  Great  Britain  the 
municipal  government  is  in  very  many  cities  in  the  hands 
of  the  same  persons  who  constitute  the  boards  of  direct- 
ors of  companies,  or  who  are  otherwise  in  the  daily  habit 
of  transacting  business  cin  a  large  scale.     It  is  therefore 


'.\s  in  Chicago  and  St.  Louis. 
'.\s  in  many  Eastern  cities. 
'As  in   Chicago. 
*As   in  Baltimore. 
'As  in  Cincinnati. 


—  7  — 
not  unreasonable  t„  expect  them  to  manage  the  city 
fheTal' T  l^  ^-J-inistration  of  the  public  tnilities  w  h' 
the  same  skill  and  mterest  which  thev  throw  into  their 
pnvate  affa,rs.  If  one  glance,  at  the  names  of  mhe 
uf  the  lown  Councils  of  Glasfjow  or  liirminsham  for 
example,  one  finds  those  of  leadin,.  business  men  in  b'h 

i  This  is  the  reason  that  the  people  have  beeh  willing 

,  ^  to  entrust  them  with  large  enterprises.     The  traditi       o! 

personal  honesty  which  f,  ,r  n.any  years  has  attach  isel 
t<.  the  councis  of  the  larger  cities,  the  .lefinite  exch  n 
..f  general  party  politics,  the  ,lisinteres,ed  cha  act  r  of 

cerned-they  are  not  pa>d  as  in  the  United  States  and 
Canada)  an,l  .he  practically  complete  absence  of  atr!",^ 
age  (so  far  as  the  councillors  arc  concerned,  comC  o 
make  possible  the  extension  of  municipal  activi^e  in 
fields  that  could  not  without  grave  risks  be  occ  pie,  v 
municipalities,  either  in  the  United  States  or  i,  cTnada 
under  present  conditions.  v^ana.la, 

5-   In  the  present  state  of    municipal    and    commnv 
accounting  ,t  is  impossible,  and  in  any  conceiva  I      ta.e 
of  accounting,  it  would  be  difficult  to  make  pre     e  cm 
parisons  between  the  cost  to  the  public  of  mun  c  pal    nd 
joint  stock  supply  of  public  services  '"""'"I'-il  and 

It  IS  therefore  not  surprising  to  have  the  most  diver- 
gent  mferences  from  the  available  data.     We  are  driven 

(a.)  If  a  municipality  is  in  a  position  to  borrow 
money  at  a  lower  rate  than  a  joint  stock  cLpanv  I 
.s  because  its  tangible  property  afifonls  a  relative  v  more 
ample  security  than  the  property  of  the  Joint  sto  k  com 
pany.  The  risk  to  the  lender  is  less  in  one  case  th-,V, 
the  other,,  but  the  risk  of  the  enterprise  is  he  s^nT^e 
borrower,  in  one  case  the  joint  stock  company,  is  obliged 


to  pay  in  tlie  interest  payment  for  a  risk  which  the  prop- 
erty does  not  enable  it  to  carry  on  its  own  acconnt ;  in  tlie 
other  case,  the  municipahty  tatces  at  least  a  jiart  :>f  the 
risk  on  its  own  shoulders.  Its  relatively  ample  property 
enables  it  to  do  so;  but  the  difference  between  the  inter- 
est paid  by  it  and  the  interest  that  would  be  paid  were 
the  money  to  be  borrowed  by  a  joint  stock  coin]iany  is 
not  gain,  it  is  an  insurance  premium  on  a  risk  taken  by 
the  municipality,  and  it  should  be  dealt  with  as  such'. 

Apart  from  the  question  whether  the  public  author- 
ities are  entitled  to  embark  on  s])eculative  enterprises 
with  the  funds  of  the  public,  there  is  to  be  considered  the 
effect  upon  the  borrowinp;  powers  of  the  municipalities, 
of  incidental  additions  to  their  debts,  caused  liy  embarka- 
tion on  public  service  enterprises. 

If  a  municipality  borrows  even  for  productive  pur- 
poses larf^e  sums  every  year  or  two.  its  securities  arc  a])t 
to  ckifT  the  market,  and  however  high  the  city  may  stand 
financially,  it  may  be  difficult  on  occasion  to  negotiate  its 
securities.  Even  national  governments  find  these  diffi- 
culties at  times.  A  distributed  load  is  generally  preferred 
to  a  concentr.ited  one.      The  equilibrium  is  more  stable. 

The  presumption  is  that  the  mor»  a  city  borrows  in 
proportion  to  the  total  taxable  value  of  the  property  of 
the  citizei^s.  the  higher  rates,  other  things  being  equal, 
will  the  city  have  to  pay  ultimately  on  the  whole  of  its 
debt. 

If  loans  are  contracted  with  specific  liens  upon  par- 
ticular productive  enterprises,  they  will  be  effected  at  a 
higher  rate  of  interest  than  would  be  the  case  otherwise ; 
because  the  margin  of  value  for  risk  is  less. 

So  far  as  interest  on  borrowed  capital  is  concerned, 


'  Tht:  iiueslion  of  risk  lias  been  fullv  discussed  t>y  Major  Dai 
remarkable  book  on  Municipal  Trailing. 


—  9  — 

it  is  thus  not  clear  that  the  immicipahty  has  any  ailvaii- 
tage  over  tlie  i)rivatcly  orsani/ed  joint  stock  company. 

(h. )  The  manafjenient  hy  nuinici|ialitics  of  <le|iart- 
ments  of  public  service,  if  it  is  eflicient,  is  not  hkely  to  cost 
less,  anil  is  rather  likely  t..  cost  more  than  a  similar  serv- 
ice (itherwise  rendered. 

In  niipst  tnnnicipal  enterpri.ses,  even  perhaps  in  the 
longest  estahlisheil  and  hest  of  them,  there  is  a  disposi- 
tion on  the  one  hand  to  pay  relatively  hiffli  washes  to  the 
tnaniial  laborers  and  relatively  low  salaries  to  the  man- 
agers. The  results  are  apt  to  he  inefficient  management 
and  excess  in  the  number  of  employees;  the  high  wages 
and  e.Nceptioiial  conditions  cjf  emplcjyment  attracting 
many  who  would  other  wise  seek  employment  elsewhere. 
The  municipal  enterprise  tlius  becomes  saddled  with 
costs  for  service  to  which  joint  stock  management  is  not 
open. 

Inquiry  into  municipal  entcr])riscs  has  in  every  case 
confirmed  the  general  inference  that  niunici])al  manage- 
ment is  more  expensive  than  private.  The  higher  wages 
offered  by  advocates  of  municipal  ownership  must  be  rep- 
resented by  Iiigher  cost  to  tlie  tax  payers. 

6.  I  have  hitherto  considered  municipal  ownership 
and  operation  of  public  services  without  discriminating 
between  them. 

There  are  many  cases  in  Hliich  tnunici])al  ownership 
with  private  operation  is  preferable  to  any  other  furm. 
Nevertheless  many  of  the  considerations  which  apply  to 
municipal  operation  api)Iy  also  to  municipal  ownership. 
Tlie  political  features  are  apt  to  be  alike  in  both  cases. 

Some  of  the  financial  features  are  also  alike,  but  legal 
conditions  may  be  such  as  to  make  ownership  by  the 
municipality  or  the  State  a  great  advantage  in  preventing 
disputes  as  to  the  use  of  streets. 

Ownership,  however,  implies  responsibility.  If  we 
have  the  ownership  vested  in  one  body  and  the  executive 


—  ID 


in  aiifitlicr.  wc  liavc  at  least  i.nc  check  u])<iii  tlie  actions 
of  eitlier.  If  iiwiieisliip  and  executive  are  comliineil,  anil 
still  tncire,  if  we  ail'l  to  these  functions  that  of  operation, 
we  have  no  check  exceptinR  the  indefinite  and  spasmodic 
check  of  ptthlic  opinion,  and  the  unseen  though  irresist- 
ihle  econ..niic  forces  which  s..nietimes  engulf  us  hefore 
we  are  aware. 


